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By Addison Kalmbach
Cronkite News

TEMPE – Although the University of Arizona’s budget shortfall is closer to $140 million than the $240 million previously reported, the school is prepared to undergo sweeping changes in budget and oversight, including addressing the $35 million shortfall tied to the athletic department.

That was the message delivered Thursday at an Arizona Board of Regents special meeting and executive session.

“We are going to be very, very careful about this and really go through a careful process to really define the scope and nature of the problem that we are facing right now,” said John Arnold, the executive director for the Arizona Board of Regents and interim senior vice president and CFO of the university.

He expects it to take 18-36 months to implement the program.

The university’s budget shortfall was discovered in November. Officials responded by instating a hiring and compensation freeze and deferring several large-scale projects. The freeze, expected to last until at least July, could save the school at least $16 million.

The school is undergoing widespread change. On Monday, it fired athletic director Dave Heeke, just days after hiring San Jose State’s Brent Brennan as football coach. The athletic department has been under scrutiny for the loss of major donors and the handling of former coach Jedd Fisch’s contract.

The financial crisis comes at a time when the success of both the football and basketball programs is being recognized.

Arnold believes changes in the landscape of college sports, from NIL deals to the addition of a transfer portal, have left many collegiate athletic departments struggling with their finances.

“We’re looking hard at athletics and what we can do to modernize that department,” he said. “But ultimately, the national model around athletics has changed over the last five years.

“As we modernize the University of Arizona’s athletics department, I think there’s going to have to be a broad university discussion about what do we want out of the University of Arizona’s athletics, what do we want out of that experience, what products do we want to provide and then be realistic about what are the costs to provide those products.”

Some competitive programs at the university could feel the consequences. Some members of the Arizona Esports teams recently learned their program was cut, although it is unclear if the moves were related.

Fred DuVal, chairman for the Arizona Board of Regents, opened up the public information portion of Thursday’s meeting by addressing what he called two urban myths. He said, “There are no dollars missing (from the university) and (this was) not caused by the acquisition made by (Univerity of Arizona Global Campus) and articles to the contrary are simply wrong.”

Arnold highlighted a plan that he put in place to ensure the university could pay back debt owed. He singled out slow spending, defining the scope and nature of the problem, developing a solution and implementing a new budget model with the target fiscal year of 2026. To help drive results, Arnold and staff are looking at other universities that have experienced similar budget shortfalls for guidance.

“We are on a cost trajectory that is alarming and we need to change that cost trajectory and then ultimately we’ll have to implement a new budget model,” Arnold said.

Arnold believes that a resource allocation model along with a newly implemented budget model over the next 10 years will be key.

“There’s a lot of terrific (and) wonderful culture at the University of Arizona that is entrepreneurial and discovery-oriented,” Arnold said. “We want to be able to retain those beautiful things about the University while instilling some fiscal discipline.”

The university remains committed to finding a solution.

“The first step is to diagnose the problem before we start giving out the medicine,” Arnold said.

On Thursday, the board also approved the hiring of Brennan and NAU football coach Brian Wright.

“I find myself back at the UofA and (I’m) like, ‘Oh my God,’ this is really happening,” Brennan said. “This is real and (I’m) really excited to be back (in Tucson).”

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